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The Affordable Care Act / Pizza Parable

(On Tuesday, there was some major drama in the world of healthcare, when two courts arrived at opposite rulings on the legality of ACA subsidies. ALEX implementation expert intern and self-described ACA nerd Diane Haberkorn shared her breakdown of the situation with our team…and it was so clever and smart, we thought we’d pass it on to you. Take it away, Diane!)

Inspired by a pizza analogy used by one of the judges in his opinion on ACA subsidies, I came up with my own pizza/Jellyvision-related analogy to help explain what’s going on. (If you want to cut to the chase, just skip to the bolded part near the bottom.)

It’s lunchtime, and Jellyvision CEO Amanda Lannert has mandated everyone who works for Jellyvision must buy pizza, and most people can use a coupon!

(Read: the federal government said everyone needs access to health insurance at a cheap rate, thanks to IRS subsidies.)

Amanda sends out an email to all of Jellyvision with the subject line of ‘15% OFF PIZZA FOR EVERYONE.’ But if you read further in the email and all the attachments, Amanda’s coupons actually say you can get 15% off a pie from Windy City Pizza.

(Read: the law says those who have state-run exchanges get subsidized health insurance. But in another part of the same law, it just says those who buy insurance through ‘an exchange,’ i.e. any exchange, state-run or otherwise, get subsidized health insurance, too.)

Jellyvision’s Chicago office has a Windy City Pizza, so every Chicago-based Jellyvision employee knows they’re getting some cheap pizza. SWEET! But what about vice president for channel sales Dave Churchill? He lives in Denver, and doesn’t have a Windy City Pizza. He can only get Mile High Pizza.

(Read: if states don’t offer an exchange, they default to the federally run insurance.)

Since the message in the email was ambiguous, all the Jellyvision interns are consulted and asked to decide what they think should be done. Some interns think Dave in Denver should get the discounted pizza because ‘Duh, it’s pizza, everyone should have that.’ But other interns think Dave doesn’t qualify for the pizza discount because ‘THERE WAS A COUPON! DON’T YOU READ THE FINE PRINT?’

(Read: Yesterday, one court made the decision that the IRS subsidies are void if you buy insurance on the federal exchange, HealthCare.gov, based on unclear writing. But another court decided the IRS subsidies should go to anyone, no matter if they buy insurance on a state or federal exchange.)

The implementation expert (IE) interns’ decision will sway the final verdict. But if the IE interns can’t come to a unanimous decision, there will be a split, and the matter will have to be decided by Harry Gottlieb, founder of Jellyvision, creator of ALEX, and Grand Poobah of Delightful Benefits Communication.

(Read: If more appeals court can’t agree on what’s right and continues to split, then this issue will be resolved in the Supreme Court. Which is what will likely happen.)

Harry has the potential to completely strike down discounted pizza for all of Jellyvision, and that would make everything in Amanda’s ‘PIZZA FOR ALL’ email null and void.

(Read: If the Supreme Court eventually decides that these IRS subsidies are void for the federally-run exchanges, that would pretty much be the end of the Affordable Care Act as we know it today–because the whole point was to get those discounted prices to lower-income Americans.)

Long story short: The ACA was not written clearly, and now lower courts are starting to disagree on its interpretation. The law was supposed to send subsidies to anyone regardless of whether they live in a state that has a state-run or federally run exchange. But the text of the law is confusing on this point. Sometimes it says all exchanges; sometimes it says state exchanges. The opponents of the law say that the confusing language means subsidies can only go to states with state-run exchanges. Yesterday, one court agreed with them. If SCOTUS agrees with that court, the law would unravel because without subsidies, many people would not be able to afford insurance (so the individual mandate would not work) and the employer mandate would be undermined, too.

What can employee benefits communicators take away from this mess? Make sure you are using consistent language throughout your messages so your point is clear and there is no room for debate.

For more information on Tuesday’s rulings and what they mean, check out thesearticles. Also, hat tip to my older sister who helped explain things.